This Survey is published on the responsibility of the Economic and Development Review Committee of the OECD, which is charged with the examination of the economic situation of member countries.The economic situation and policies of Switzerland were reviewed by the Committee on 26 September 2019. The draft report was then revised in light of the discussions and given final approval as the agreed report of the whole Committee on 15 October 2019.The Secretariat’s draft report was prepared for the Committee by Christine Lewis and Patrice Ollivaud under the supervision of Vincent Koen. It benefitted from contributions by Thomas Chalaux, Andrés Fuentes Hutfilter, Yvan Guillemette and Marius Luske. Research assistance was provided by Lutécia Daniel. Editorial assistance was provided by Michelle Ortiz and Sisse Nielsen.The previous Survey of Switzerland was issued in November 2017.Information about the latest as well as previous Surveys and more information about how Surveys are prepared is available at http://www.oecd.org/eco/surveys

Switzerland has the third-highest GDP per capita in the OECD, thanks to high employment rates and productivity levels. These support, and are supported by, good health outcomes and a well performing education system.

Switzerland’s living standards remain high. Its population is healthier than in many countries and is well educated. This contributes to high employment rates and narrow wage differentials. As a small open economy, Switzerland has benefited from the flow of ideas, people and capital. It boasts world-class industries and attracts international talent. Zurich and Geneva routinely rank among the world’s most liveable cities. The challenge is therefore to sustain these achievements.

Swiss society is ageing. At the same time, life expectancy is increasing. With most workers retiring around age 65, time in retirement is growing and the ratio of retirees to employees is set to soar. These developments bring a range of opportunities but will likely weigh on growth in GDP per capita and increase public spending. They may also widen existing inequalities. This chapter highlights three key policy challenges to preserve high living standards in coming decades. First, the pension system ensures good retirement incomes despite a lack of reforms. However, reforms are urgently needed as the system is under increasing pressure. Second, a range of disincentives and barriers in the labour market and tax system contribute to early retirement and involuntary retirement. Boosting employability at older ages and broadening older workers’ options would dampen the economic impact of ageing. Third, the Swiss health system delivers good outcomes but at a higher cost than other countries, and ageing will only exacerbate the associated pressures. Cost containment and improved co-ordination are vital. Adjusting the financing of long-term care could improve access and the overall quality of long-term care.